Determining the fair and reasonable charges for the purchase of non-standard goods and services can be difficult due to the large number of variables present in pricing. It is further especially difficult to negotiate prices in advance of the purchase of goods or services having a large and variable set of parameters influencing pricing. An example of an industry where this problem is manifest in the service repair industry. In the service repair industry the setting and standardization of pricing is difficult to achieve due to several factors. First, by definition, service repair work is highly random in that it involves the diagnosis of a problem on varied types of machinery, each having a unique installation. For example, a problem with a malfunctioning HVAC system in a building may be caused by one of several components, such as a compressor or air handler, in addition, many different brands of components could be in use in a single installation, thus requiring knowledge of the specifications of many different brands of components. Furthermore, each installation is different due to factors such as varied building architecture, and geographic location. Secondly, when a service repair order is placed it is usually impossible to know the extent of the repairs needed in terms of parts and labor. Furthermore, during the repair process, what may have been diagnosed as a simple repair may be revealed to be much more complex and time consuming. Thirdly, the cost for parts can be highly variable depending on a variety of factors; such as the relationship between the buyer and seller, the volume of parts purchased, and the geographic location of the supplier. Finally, the amount of time to perform a repair is also highly variable and difficult to estimate due to many of the factors already enumerated.
Therefore it is very difficult to arrive at a fair and reasonably negotiated price for a particular repair prior to performing the repair. This situation can leave the purchaser in a position of having to accept inflated pricing for repairs because of the inability to negotiate a price or compare pricing for similar work.
An example of this situation is available in the automotive repair industry, especially with respect to warranty repairs. In the automotive repair industry, warranty repairs fees are typically paid to the dealership performing the service based on a set time and parts allowance for a particular repair. For example, a head gasket replacement would be allotted a time period for labor, such as 5 hours and a parts allowance for all necessary parts, the dealer would be paid a fee based upon the set parts and labor standards. This is possible for the automotive industry due to the high degree of standardization for all cars. In each case every part is in the exact same position in a particular model and the parts needed for a repair are readily identifiable. However, the automotive repair situation is unlike the service repair industry in that the automotive repair industry is highly standardized and the statistical sample size for automotive repairs is very large, therefore it is rather easy to determine the value of a particular repair.
Therefore, what is needed is an automated system that provides a method to determine the fair and reasonable cost for non-standardized repairs services, having highly variable parameters which affect the cost.
A second problem that is encountered with respect to the negotiation and payment of service repair bills is the manual bill receipt and payment system. Conventional bill payment is based on the receipt by mail of a paper statement from each service or goods establishment for a billing period or for a particular job or task. This is typical for both household bills as well as businesses. However, the task can be especially cumbersome for businesses dealing with a large number of bills in addition to the need for a high degree of accuracy and cost monitoring associated with the running of a business.
The tracking of costs associated with the purchase of goods and services is a high priority need of most businesses. This is especially true when there are many vendors. One of the most difficult aspects of tracking and managing costs encountered where there are multiple vendors is the standardization of pricing for identical and/or similar goods and services.
Typically, the payment of invoices from vendors is done either completely manually, (i.e. by an accounts payable clerk) who reviews and pays each invoice in accordance with for example a work order which specifies the work performed. The clerk must review the invoice and make a determination if it matches the work order and secondly whether the billed charges are fair and reasonable under the circumstances. This analysis can require a lengthy process of comparing work orders and a high degree of institutional knowledge regarding the cost of many items or tasks. Any knowledge that the clerk does not immediately possess must be determined from a reference source. In addition, any amount that is disputed as incorrect, for example, the charge for a good is too high or the amount of time charged for a task is too long then requires a lengthy process to resolve involving the clerk contacting the vendor and negotiating a price adjustment.
Even when this process is completed using a computer to assist in the process the vetting and negotiation process must still be handled by a clerk manually, which is both time consuming and inefficient.
Furthermore, when the vetting and negotiation process is handled manually, there can be a lack of uniformity in the prices negotiated for identical goods and/or services. For example, a clerk may not recognize or remember the pricing for a particular good and in one instance negotiate a reduction from a billed charge and in another case pay the billed amount. This can lead to inefficiencies in that by not having a uniform and standard payment rate for all good and services typically purchased, and excess payments may occur. In addition, a bill may not be presented soon after the work is performed, which can lead to the details of a particular job being forgotten during the delay. If details are forgotten, then the vendor may not remember the reason for a particular charge and may not be willing to accept a negotiated sum for that charge.
Thus, what is needed is an automated bill payment system that eliminates the manual vetting and negotiation of service and goods prices. The system should be easily adaptable to use with a large number of vendors. The system further should be able to maintain a database of many goods and services as well as a pricing structure for each. In addition, the system should be able to dynamically adjust the pricing of each good and/or service based on changes in the marketplace, provide immediate feedback on the reasonableness of the charges and automatically propose adjustments. The system should readily accommodate and directly facilitate the eventual transition to full electronic bill presentment and payment over electronic networks.